Back in the day … Katter with his father, Bob snr, in 1974. Photo: AAP

It's sweltering in Cairns. A small crowd has gathered in the shade of a huge Moreton Bay fig on the waterfront to support a protest rally by hospital staff. More than 400 of them are about to lose their jobs, thanks to the cost-cutting crusade by Campbell Newman's Liberal National Party (LNP) Queensland government.

Bob Katter, the workers' new best friend, has turned up early with state MP Shane Knuth. Katter, whose federal seat of Kennedy stretches from here to the Northern Territory border and covers more than half a million square kilometres, has come prepared.

As we march down the esplanade towards the rally, Katter, in trademark Akubra with jeans and a tie, parades a huge Australian flag tied to a freshly cut sapling. Knuth has a matching Eureka flag. Workers cheer from a construction site and greetings are shouted from passing cars.

So far so good for two politicians on the make. But Katter is about to put his foot in it. Or, more precisely, his size 11, suede bush boot. After short, stirring speeches from various union officials, Katter takes the microphone. He denounces Newman for taking an axe to public service jobs while preparing to spend $700 million on a new parliamentary precinct. "He's got enough money to build a pleasure palace for himself," he says, drawing a chorus of approving outrage.

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He then chides the previous Labor state government for shedding railway jobs and tells a rambling story about a nurse sacked in Charters Towers, his current home. A worker standing towards the front yells: "What about Cairns, Bob? We're not interested in railways and bloody Charters Towers."

"God bless you," says Katter.

Roping 'em in … Bob Katter expects Katter's Australian Party to one day "control Queensland". Photo: Tim Bauer

"And God bless the gays and lesbians," chimes in a woman up the back, triggering a ripple of laughter.

Then comes the porkie. Katter recalls his time as a minister in Joh Bjelke-Petersen's Queensland state government. "Joh had a blind spot on unions and that was bad. But he didn't shed a job," he declares. "Whatever the shortcomings of that government - and there were plenty - we didn't sack people." Katter has failed to notice Stewie Traill, the Electrical Trades Union (ETU) organiser for far north Queensland, standing to one side of the crowd. "That's bullshit, Bob, don't play that game," shouts Traill. "Don't go back to 1985, Bob, because you'll never win that one."

In the mid-'80s, the Bjelke-Petersen government sacked 1000 union linesmen employed by the South East Queensland Electricity Board (SEQEB), replacing them with contract workers. The confrontation triggered violent street protests and protracted power blackouts before the government won. Later, Katter will concede over a meal that the SEQEB fight was a shameful episode in which Bjelke-Petersen sought to break the union and crush its membership. The events contributed to his disillusionment with and ultimate estrangement from the National Party.

Stetson and son … Katter with his son Robbie, last year. Photo: AAP

Today, while the Queensland branch of the ETU might be slow to forgive or forget, Katter is best mates with a bunch of union leaders, including Victorian ETU boss Dean Mighell, whose support has been pivotal in his bold campaign to build a new force in Australian politics that will challenge both his old conservative cronies and Labor.

The ambition of Katter's Australian Party (KAP) is to seize the balance of power in the Senate and pick up seats in the House of Representatives in this year's federal election. And Katter is determined to use that power, if he gets it, to turn back the tide of free trade, to revive Australia's embattled manufacturing and agricultural sectors and to usher in a new era of "developmentalism" in Australia.

But before all that, Katter clearly needs to polish a few aspects of his CV - including his record on industrial relations, his position on gay rights and on the story of his remarkable transformation from a leading light in one of the most right-wing governments in Australian history to the picket-line maverick of today.

Bob Katter began life with his fists - in Cloncurry, western Queensland, the hottest town in Australia. He says his childhood made Huckleberry Finn "look like a wuss", with he and his mates spending their free time exploring abandoned mine shafts, swimming in flooded rivers and playing with guns.

"My mother was a Brisbane girl and in Brisbane children go to school in shoes and socks," says Katter. "I nearly got killed. Every night after school I was bashed up. What do you think is going to happen when you are the only kid in the school wearing shoes and socks? Those kids teethed on leather. It was sort of get tough or die. So I got tough. I got real tough, actually." Jack Fraser, an old cattleman and longtime friend of Katter who we meet one night in Mareeba, west of Cairns, can vouch for that. Fraser - whose rugged credentials include a severed hand sewn back on after a confrontation with a bull - remembers a brawl at a pub at Julia Creek when Katter was in his 20s. "This bloke kept badgering Bob, poking him in the side. He wouldn't leave him alone. In the end Bob just turned around and flattened him," says Fraser. "He's a wildcat, that one."

The young brawler and captain of the Cloncurry Tigers rugby league team took a while to settle down. In a private tribute to his mother several years ago, Katter wrote: "After many years at university I left a failure and I buried myself in Cloncurry, the hard-bitten frontier town of my childhood. I had no profession, no business, a wife, two kids and eked out a living as a projectionist in my parent's picture theatre. My mother's interest in me was just the same as it would have been if she'd lived for another 10 years and actually seen me sworn in as Queensland's youngest cabinet minister, owner of a working copper mine and 250,000 acres of unencumbered cattle station."

Politics was always Katter's destiny. His grandfather, a businessman of Lebanese descent, was active in local government and his father, Bob snr, was a Catholic trade unionist who quit the ALP during the 1950s split and held the federal seat of Kennedy for the Country Party and its successor, the National Party, from 1966 until his retirement in 1990.

Bob jnr was elected to the Queensland Parliament in 1974 and was a National Party minister between 1983 and 1989 before falling out with Bjelke-Petersen's successor, Mike Ahern. He moved to federal politics in 1993, recapturing Kennedy from Labor. Increasingly disaffected with the Coalition's economic policies, he turned independent in 2001.

"I had to get out of the National Party because they were ruining my electorate. I was a dingo who stayed too long," he says, citing the destruction of the sugar and tobacco industries and the loss of jobs in fisheries and boat-building in Cairns. "When they deregulated dairy, I had just reached the end of the road."

He thought his political career was doomed: "No one had ever been re-elected as an independent. I was walking into an open grave." He has been returned at the four elections since then, now drawing more than 50 per cent of the primary vote. Kennedy has become Katter freehold.

Bob Katter is easy to caricature: the hat, the three-piece suits, the snowy hair and rugged facial features that might cast him as a character in a Norman Lindsay sketch. Peter Beattie, the former Labor Premier of Queensland, says: "I quite like him, but he can be as mad as a cut snake. Because he is so outspoken, his political support often looks better than it is."

Katter is irrepressible, a whirlwind of words, ideas and energy. He turns 68 next month and had quadruple heart bypass surgery in late 2007, but nothing seems to slow him. On a two-day tour of Cairns and the Atherton Tableland, he seems to know every second person and everyone knows him. Strangers greet him like an old friend. Even folks from the opposite side of politics are polite and curious to engage with him, and he with them.

There's a meeting in Mareeba for workers who have lost their jobs and entitlements with the collapse of mining company Kagara. The bank is about to foreclose on George Peterson and his wife, Flo. "If Bob can't do anything to help us, no one can," says Peterson. "At least he has a go."

Katter is tough and temperamental, but away from the political bear pit in Canberra he is polite and personable in the nicest way of the bush. In restaurants in Sydney and Melbourne, he remembers the names of waiters and drops by the kitchen to thank the bemused staff before leaving. At a busy intersection in Cairns, he winds down the window to greet a couple of kids wrestling a curbside advertising hoarding in the heat.

Over a sandwich in a coffee shop, he shares a table and animated conversation with an elderly couple who ask for his autograph and a bearded cyclist who declares himself a Greens stalwart. He wanders back from an op-shop in Mareeba with a book he doesn't want. "Her business was slow, so I thought I should buy something," he says, with a hint of embarrassment at the soft-heartedness of the gesture. He eschews the gold-pass perks that are the right of all members of Federal Parliament. He insists on flying economy class and refuses to use the luxurious Qantas Captain's Club lounges, preferring to sit in the public areas with a milkshake, chatting with whoever wanders by. "How can I go travelling in first class? What would people think?" he says.

He is an idealist in an age of cynicism, an unaffected political everyman at a time of every man for himself. He proposes tough options when the leaders of Labor and the Coalition often chart the path of least electoral resistance on big issues.

For a man with a keen interest in world events and the sweep of history, Katter is surprisingly untravelled. He has been overseas just once - a tour in 2006 that took him to Canada, the US and Brazil fact-finding on perhaps the dearest of his pet projects: ethanol.

Political opponents dismiss Katter as being mad and many journalists regard him as a clown. On both counts they sell him and themselves short. Some of his policy pronouncements may be radical and unconventional - even naive and unworkable - but they are heartfelt and spring from a passionate nationalism and a conviction that the Australian economy has lost its way.

Katter wants to abandon free-trade agreements and restore protection for manufacturing and agricultural industries. He wants to stem the tide of foreign takeovers of Australian industries, farms and jobs. He wants an end to the privatisation of state-owned assets. He wants ethanol mandated as a fuel additive to revitalise the sugar cane and grain industries. He wants a return to full arbitration in industrial relations. He wants the Coles-Woolworths supermarket duopoly broken up. He wants to force Qantas to keep most of its crew and engineering jobs in Australia. He wants it all and he wants it now.

His message resonates with a diverse array of Australians. James Packer donated $250,000 to the party last year, praising Katter's "passion for this great country". Ad man John Singleton gave $50,000, as did the Victorian branch of the ETU and the Construction, Forestry, Mining and Energy Union.

The ETU's Dean Mighell, who, unlike his Queensland comrades, is a strong friend and supporter of Katter, has resisted intense pressure to head the party's Senate ticket in Victoria. "Bob could be the saviour of the Australian working people if he wins the balance of power," says Mighell. "A huge number of blue-collar people are attracted to Bob when they hear him. He has a very powerful message that free trade is killing this country."

Two years ago, Mighell invited Katter to address a gathering of 380 ETU shop stewards from across Victoria. "He got a standing ovation, and our blokes wouldn't stand for the f...ing Queen. I've done a lot of speaking, but he put me in the shade. He absolutely killed them. He talked their language and that's something Gillard and Rudd can't do."

One of Bob Katter's greatest passions is the plight of indigenous Australians.

"I identify with them. I'm not white and I come from Cloncurry. I'm not too sure where my racial background has come from but I am not going to argue if someone calls me a blackfella. I'm not going to argue that I am not," he says.

"There's a name in Cloncurry. We call ourselves the Curry Mob. There's Afghans and Lebanese, a lot of Chinese. You name it, you'll find them in Cloncurry. They've all intermarried over 220 years and they just refer to themselves as the Curry Mob. The blackfella radio station is Mob FM - it's the Curry Mob. We stick like glue and it doesn't matter whether you are blackfella, whitefella, pinkfella or whatever." Katter is furious that native title legislation has failed to give effective land ownership to indigenous communities. He wants "Mabo II" - a fresh High Court challenge to ensure communities get land titles that enable them to borrow to build houses and businesses.

He describes a confrontation a couple of years ago with federal Indigenous Affairs Minister Jenny Macklin, during which she defended 99-year leases. "I got angry. I said, 'I'm taking off my member of parliament hat and now I am putting on my blackfella hat. You will not bloody well tell me, in my country, where my forebears have lived for 40,000 years, that I will have an inferior title deed to everyone else in this country.' I was so bloody wild, she burst into tears. And I said, 'I'm telling you, Jenny. You can cry and bawl and throw yourself on the floor, but we won't be copping it. We want the same title deed as everyone else in this country - perpetual, freehold title deed.' " He says they have not spoken since. Macklin's office declines to respond.

Katter is proud of his four years as Queensland Aboriginal affairs minister in the '80s. He gave communities land ownership through "deeds of grant in trust" - a scheme later abolished by Labor - and promoted projects employing Aborigines to build houses in their communities.

Cape York Aboriginal leader Noel Pearson says he originally opposed a lot of what Katter was doing. "I realise now that I was wrong. He was 25 years ahead of his time. A lot of the things on our developmental agenda were things Bob commenced when he was state minister. I didn't understand what he was doing breaking down the socialist enclaves in indigenous communities."

Pearson says Katter was a role model for his career as an activist and John Howard "made a big mistake" not appointing him Aboriginal affairs minister during his decade in power. "One of the reasons I got into advocacy and public debate was Bob. I was just out of my teens when I first got to know him. He said, 'You guys have got to have a go. Get into the debate. Get into politics.' "

Bob Katter's faith in the power of independent mps was shattered after the last federal election when he and two other independents - Tony Windsor and Rob Oakeshott - emerged with the power to determine whether Julia Gillard or Tony Abbott would form government. Katter presented a 20-point list to both leaders and said he was ready to back whichever side signed up to his agenda.

Despite their deep policy differences, Katter is close to Kevin Rudd and respects Gillard: ''She's got guts and she sticks to her word.'' But in the end he sided with the Coalition, while Windsor and Oakeshott backed Labor.

The failure of the process to advance his agenda left Katter disillusioned and convinced there was no future for independents: "We had two weeks of negotiations. All three of us represent rural Australia. But we failed to deliver anything for the people of Australia. We had the greatest platform that any three people have ever had in Australian history and we came away with nothing." That sense of failure drove Katter to form his own party.

Now the stars are aligning for the KAP in Queensland. The state election last March saw Labor routed after a decade in power, reduced to just seven MPs. And already the gloss has gone from Campbell Newman's LNP government as it has moved to slash 14,000 public sector jobs.

A Galaxy poll in late February showed LNP support had fallen to 43 per cent, down 6.7 percentage points since the 2012 state election. This followed the resignation of two ministers for misconduct and the defection of three more disgruntled MPs. One of them was Ray Hopper, a former LNP front bencher who is now state leader of the KAP, joining Shane Knuth and Robbie Katter, Bob's son, in state parliament.

Katter believes he can capture enough support in the coming federal election to build the KAP into the new "third force" in Australian politics. He reckons he can expand on the base already established in northern Queensland by drawing voters disaffected with both major parties around the state, while capitalising on Labor's unpopularity across the nation.

The party has vowed to field Senate candidates in every state and territory and to contest all 150 House of Representatives seats. "That might be a bit aspirational, but we need to win not just in the Senate," says Katter.

In the Queensland election, the party scored 11.6 per cent of the vote. Exit polling indicated they would have got an extra 8.3 per cent - or a total of one in every five votes - had the state electoral commission not abbreviated their name to "Australian Party" on the ballot papers, confusing many supporters.

Katter predicts the party will take at least four Senate seats - two in Queensland, and one each in NSW and Victoria, where he thinks it can draw sufficient support to beat other minor parties to the sixth seat at stake. He is also optimistic of snaring the House of Representative seats of Herbert and Dawson in north Queensland.

But before it gets to the election, the KAP faces two existential challenges - maintaining unity and discipline among a disparate membership and raising enough money to run an effective national campaign. Public bickering over gay marriage and internal squabbling over preselections has cost momentum and diverted attention from policy priorities over recent months.

The party's former national secretary, Bernard Gaynor, was suspended in January after tweeting that he would not let gay people teach his children. He later resigned, accusing the party of refusing to oppose abortion. Then Tess Corbett withdrew her nomination for the federal seat of Wannon in Victoria after claiming paedophiles would be "next in line to be recognised in the same way as gays and lesbians and get rights".

Other party members have condemned Katter for failing to take a stronger stance against "gay bashers" within their ranks. At the same time, Katter has had to fend off party conservatives angered by his refusal to condemn ACT Senate candidate Stephen Bailey for publicly supporting gay marriage in defiance of party policy. The public slanging has been damaging, but Katter shrugs it off: "We have a crisis every day in this party. One day I am a homophobe, the next I am soft on gays."

More pressing is the issue of fundraising. The party received $2.1 million in donations last financial year. It will need a lot more to fight a federal election. "All this is predicated on us raising a lot of money. We are talking millions and there is a lot of work to do," Katter concedes.

He is still in touch with mining magnate Clive Palmer, who shares his distaste for the Newman government and could solve the KAP's financial problems with one signature - if not for some serious differences on policy. Katter says he told Palmer - who was a fellow Young Country Party member in their university days - that he didn't think they could "climb into bed together" because Palmer supports privately owned rail lines, anathema to the KAP. "That's a beat-up by Bob," says Palmer. "I don't care who builds them, so long as they are built."

Palmer says he has a problem with Katter's position on guns: "He's not in favour of the current gun-control laws, and I believe what John Howard has done has saved many lives in Australia." Palmer predicts the KAP will do well drawing support from voters unhappy with both Labor and the Coalition, but not as well as Katter thinks. "There is great dissatisfaction with both major parties," he adds.

Driving through Melbourne late one night, Katter has his hat on his lap and his heart on his sleeve. "I haven't ever attempted what I am doing now. I've never asked the Australian people to believe there is a third way. But when I see another part of Australia being sold overseas, I just go into a rage. When I see jobs being taken away from Australia and going overseas, I get furious."

He sees his task as a matter of destiny: "Our family have been powerful, off and on rich, and when we walk into a room they say, 'He's a Katter, you know.' And there are certain responsibilities that fall upon our shoulders. You know you are expected to stand up."

His ambition is to build a political movement that "ensures Australia once again becomes a country passionately committed to development, the building of railway lines, electricity lines, an ethanol industry, mobilising the superannuation funds, restoring the two million megalitres that have been taken out of the Murray Darling."

Peter Beattie is sceptical: "The history of elections in Queensland is that the winners tend to win by big margins. John Howard did, Joh did, I did and Campbell Newman did. Smaller players tend not to do so well. Katter is a very good grassroots campaigner. But if Abbott can hold his support in Queensland, then I don't think Katter's party will do that well."

But Katter has no doubts: "I expect we will control Queensland in my lifetime. As Victor Hugo said, there is nothing so powerful as an idea whose time has come."